Shooters’ deal secures power sell-off

“Our bigger public interest test here is to unlock the asset value of the generators to assist us in rebuilding the economy” ... NSW Premier Barry O’Farrell.
Photo: Louise Kennerley

by
Michaela Whitbourn

A deal giving recreational shooters in NSW access to national parks to cull feral animals including pigs, rabbits and deer has allowed the passage of laws to sell the state’s electricity generators to raise up to $3 billion to spend on infrastructure.

Two crossbench MPs from the Shooters and Fishers Party supported a bill in the NSW upper house to sell the state-owned power stations Eraring Energy, Delta Electricity and Macquarie Generation after ­protracted negotiations with the O’Farrell government.

The bill will pass Parliament this week.

Treasurer Mike Baird said the sale would give the government “significant firepower" to tackle the state’s infrastructure backlog.

Advisers to the transaction are expected to be appointed by July 1 but the assets are unlikely to be put on the market until next year.

Labor and the Greens expressed outrage at the Coalition’s political manoeuvring to win support for the bill, which stalled in the upper house earlier this year.

As part of the deal with the crossbench, NSW Premier Barry O’Farrell has agreed to allow licensed amateur shooters to cull feral animals in 79 of the state’s 779 national parks.

Shooting will not be allowed near metropolitan areas or in wilderness or world heritage areas.

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“We have to live with the Parliament that the people of NSW have given us," Mr O’Farrell said.

“Our bigger public interest test here is to unlock the asset value of the generators to assist us in rebuilding the economy by delivering the infrastructure needed to get this state going again."

The Shooters won further protections for power station workers, including employment guarantees of up to four years for workers transferring to the private sector and transfer payments of up to 30 weeks’ pay.

The number of apprentices working in the generation sector will also be increased by 25 per cent.

Mr O’Farrell said the sale was expected to generate gross proceeds of $3 billion.

This does not include proceeds from the sale of power station development sites and the sale or lease the planned Cobbora mine in the state’s central west, which are also on offer.

Mr O’Farrell said the state would avoid $850 million in operation and maintenance costs for the generators and potentially an additional $6 billion in costs related to future generation capacity requirements.

But upper house Greens MP John Kaye said there was no $6 billion saving because the Australian Energy Market Operator had made it clear that NSW did not need new baseload generation “any time within the planning horizon".

Opposition Leader John Robertson said the sell-off would push up power prices, but business groups welcomed the move.

Infrastructure Partnerships Australia chief executive Brendan Lyon said the next step was the reform and sale of the state’s “poles and wires" electricity networks to unlock up to $30 billion.

But Mr O’Farrell stood by his commitment not to sell the networks in his first term.

Successive NSW Labor governments had tried and failed from 1997 to privatise the electricity industry, with a full sale eluding former long-term premier Bob Carr and former minister Joe Tripodi.

Former Labor Premier Kristina Keneally spearheaded the partial privatisation of the industry with then treasurer Eric Roozendaal, in a deal completed in early 2011.

The $5.3 billion sell-off gave Origin and TRUenergy the right to trade in the electricity output of the Eraring and Delta West power stations under “gentrader" contracts.

Mr Roozendaal blasted Mr O’Farrell for blocking a full privatisation of the generators when the coalition was in opposition.

“The gentrader was the next best option available to the government ... because of Barry O’Farrell’s opposition," he said.

Mr Roozendaal broke ranks with his Labor colleagues by supporting a sale in principle. But he voted against the bill because the coalition had “picked the wrong time" given global economic turmoil.

“I wouldn’t trust these bozos to do it in a month of Sundays," he said.